Temer is also sinking the real estate market.
The Abrainc-Fipe Radar for December reveals that the general conditions of the real estate market presented an average score of 2,3 on a scale between 0 (least favorable) and 10 (most favorable), indicating a further deterioration of market conditions in October 2016. This update also marks the lowest level in the historical series, which dates back to January 2004.
São Paulo, December 27, 2016 - O Abrainc-Fipe Radar The December report reveals that the overall conditions of the real estate market received an average score of 2,3 on a scale of 0 (least favorable) to 10 (most favorable), indicating a further deterioration in market conditions in October 2016. This update also marks the lowest level in the historical series, which dates back to January 2004.
The analysis shows that there was a slight recovery in confidence indicators and financing conditions, which ensured, respectively, stabilization in the group of indicators for the macro environment and mortgage lending.
On the other hand, declines in demand indicators (-0,3) and the sectoral environment (-0,2) negatively impacted the overall average score. The continued negative outlook for demand is associated with declines in labor market-related indicators, such as employment and payroll.
In total, four of the 12 indicators are at their lowest levels in the historical series: employment, payroll, activity, and property prices. In 2016, the average score given to the general conditions of the real estate market in the Abrainc-Fipe Radar accumulated a drop of one point.
Looking ahead to the last 12 months, the 1,1 percentage point decline still reflects the continued restrictive credit environment, the contraction in demand, and the decline in economic activity in the country.
Abrainc's executive vice president, Renato Ventura, states that the real estate sector has been significantly impacted in recent years, with a substantial loss of jobs, which fuels unemployment and delays recovery. "We hope this cycle will begin to reverse in 2017, allowing for job creation and contributing to the necessary recovery in housing production," says the executive.
Access the historical series of the study. here.
See Radar Glossary.
It is worth remembering: In the "Macro Environment" dimension, for example, there is information regarding macroeconomic variables and conditions of the Brazilian economy, such as Activity, Confidence, and Interest Rates. In the Mortgage Credit section, the analysis is covered by the indicators Financing Conditions, Actual Loan Disbursements, and Attractiveness of Mortgage Financing.
Regarding Demand, data on Employment, Wage Bill, and Attractiveness of Real Estate Investment are interpreted. Finally, the Sectoral Environment dimension shows analyses of Inputs, New Developments, and Property Prices.
Study methodology
The Abrainc-Fipe Radar combines twelve indices from the real estate and economic sectors across four dimensions: sector environment, macroeconomic environment, demand, and mortgage credit, with data dating back to January 2004.
Each indicator has its own calculation methodology, developed to capture the desired relationship (interpretation) between its average and the market conditions faced over time. Therefore, averages from 0 to 10 are assigned to each indicator, making it possible to present all twelve indicators on the same scoring scale.
Over time, the averages of the indicators will exhibit behavior corresponding to the variation in real estate market conditions, so the level can indicate whether the current scenario is: favorable and/or stimulating activity in the sector; close to the historical trend or what is expected for the moment; or compromising and/or discouraging the sector.
The Abrainc-Fipe Radar report is published monthly, and the data sources are public. The complete methodology for developing each indicator can be found in the glossary and attached presentation of the study. Access the materials:www.abrainc.org.br ou www.fipe.org.br .
About ABRAINC
ABRAINC was established in 2013 with the goal of bringing more efficiency to management, qualifying and improving the real estate development process. Currently, ABRAINC brings together 34 publicly traded companies and/or companies with a national presence/regional relevance. Its objective is to represent these companies, strengthening the sector and contributing to the sustainable development of the country and its cities. The association works in defense of socio-environmental responsibility, ethics, integrity, and technical, fiscal, and urban planning compliance.
Among the main topics currently under discussion in the association are issues related to incorporation processes, the impact of developments on cities, bureaucracy in the various phases of the business, sector productivity, and the expansion of credit and financing.
The following companies are part of ABRAINC: Alphaville Urbanismo, BSP, Bueno Netto, Brookfield, Canopus, Canopus Maranhão, Cury, Cyrela, Direcional, Econ, Emccamp, Esser, Even, EZtec, Gafisa, Pacaembu, Helbor, HM, MRV, Odebrecht Realizações, Namour, Niss, Patrimar, PDG, Plano & Plano, Rodobens, Rossi, Setin, Tecnisa, Tenda, Toledo Ferrari, Trisul, You Inc., and Yuny.